Domain name initial interest confusion isn't dead

Platinum Properties Investor Network, Inc. v. Sells, 2019 WL 2247544, No. 18-61907-CIV-GAYLES/SELTZER (S.D. Fla. Apr. 11, 2019) (magistrate R&R)

Rival real estate investors Hartman and Sells apparently developed a “personal feud,” and Sells allegedly initiated a campaign to harm Hartman’s reputation and steal his clients. Defendants allegedly set up websites and email addresses using plaintiffs’ registered trademarks to confuse consumers and divert internet traffic.  Defendants argued that their websites were noncommercial, nonconfusing gripe sites.

The registered marks were “Jason Hartman” and “JasonHartman.com,” and defendants allegedly combined them with generic terms such as “property,” “media,” “investments,” and “real estate investments” to create web and email addresses.  Defendants’ emails and websites, they argued, contained “a litany of derogatory information about Mr. Hartman,” as well as phrases such as “investigation,” “bad news,” and “the truth about.” Thus, they contended that confusion wasn’t plausible.

Plaintiffs responded that the disparaging terms weren’t contained in the domain name itself, and argued that defendants’ acts were commercial and competitive.  Because plaintiffs alleged initial interest confusion, the absence of disparaging terms in the domain name made confusion plausible, sigh.  Only upon reaching the landing page would consumers find out that these were gripe sites.  The allegations apparently included that defendants “harvested” the personal data of actual visitors to solicit competitive business opportunities—but there’s no suggestion in the report that consumers would have been confused when entering contact information, which seems like an important question about whether the confusion could have caused harm. “Based on Axiom, Promatek, and Brookfield, the undersigned concludes that a financial injury that results from an indirect or suggestive use of a trademark may supply the necessary predicate for a Lanham Act claim.” [A dose of the Ninth Circuit’s post-Brookfield domain name realism would be really, really helpful here.]

Dilution: Federal law requires federal fame and state law requires state fame. Since “Plaintiffs repeatedly indicate that the fame of their marks is limited to a niche segment within real estate investing circles,” the claims should be dismissed.  Plaintiffs alleged a couple of million dollars in advertising and millions in revenue, but Hartman’s alleged “guru” status was limited to “his trade.” Conclusory allegations of “famous[ness]” were insufficient.

Separately, and interestingly, the magistrate revived a pre-federal dilution argument that I haven’t seen in a while, but that I like: “principles of trademark dilution have no application in scenarios where, as here, the owner of the mark, and the infringer, are involved in the same trade.” Dilution is for noncompeting goods/services.  Infringement was the proper remedy, if any remedy is required for defendants’ conduct.

False advertising/common law fraud/negligent misrepresentation: Florida requires that a plaintiff plead its own justifiable reliance to make out these claims, which plaintiffs here did not do.  Civil conspiracy and unfair competition, however, survived because the infringement claims did, and tortious interference was sufficiently pled because the complaint alleged that “Defendants’ activities did either break contractual agreements with Plaintiffs and/or stopped doing business with Plaintiffs as a result of Defendants’ intentional and unjustified interference .... For example, one client of Plaintiffs’ canceled a speaking engagement ... worth tens of thousands of dollars ....”

Invasion of privacy: The complaint alleged that defendants’ website “was, and still is, completely devoid of any privacy policy .... and solicited visitor[s’] information through a ‘Contact Us’ fill-in webform.” Defendants allegedly fraudulently obtained and published Hartman’s “personal IP address, email address, and personal information, which was obtained when Mr. Hartman sent the cease-and-desist demand through the Infringing Website’s ‘Contact Us’ webform” and the “Infringing Website publicly disclosed Plaintiffs’ private information.”  But plaintiffs didn’t allege a right of publicity claim, and it wasn’t clear what they were alleging.  Allegedly false statements about plaintiffs’ “business, financial history, litigation history, commercial dealings, alleged prurient nature, credibility, and trustworthiness” couldn’t be the basis of an invasion of privacy claim. And plaintiffs alleged that they voluntarily disclosed Hartman’s “personal IP address, email address, and personal information” when they sent a demand letter through the “Contact Us” webform.  They couldn’t reasonably expect information voluntarily disclosed to competitors and adversaries to remain private.  Moreover, in Florida, residential addresses and contact information “do not typically fall within the parameters of “private” information.” And “professionals cannot reasonably expect that this type of information will remain private given the necessity of certain disclosures for state licensing applications, such as those relevant to the real estate and investment sectors,” which was the case here.  And further, Hartman disclosed the same information when he filed a criminal complaint against defendants. “Hartman’s expectations of privacy, even if reasonable, are ultimately irrelevant as these quintessentially public records are not entitled to privacy protection under Florida’s Sunshine Laws in any event.” However, the magistrate recommended allowing leave to replead a claim for commercial appropriation [which would have serious First Amendment problems if there wasn’t a false endorsement; you shouldn’t be able to avoid negative comparative advertising by using your name as your business name].